Our new Cryptocurrency section has arrived! Click here

Less Ads, More Data, More Tools Register for FREE

SSE Says Collaboration Is Needed In UK, EU Energy Markets

Fri, 24th Jun 2016 07:27

LONDON (Alliance News) - SSE PLC Friday said there needs to be a collaboration between the energy markets in Great Britain and European countries following the decision by the UK to leave the European Union, but said there is no immediate risk to the company from the result of the historic referendum.

The UK has decided to exit the European Union after the Leave campaign was declared victorious early Friday morning with 52% of the votes cast compared to the 48% in favour of Remain.

SSE shares were trading down 6.9% to 1,442.66 pence per share on Friday morning.

The FTSE 100 utility firm, which is head-quartered in Scotland, said the result should not lead to any sudden changes or implications for the company, but warned the level of risk could increase in the future.

"The result of the EU referendum presents no immediate risk to how SSE serves its customers or to the investment that it continues to make in order to fulfil its core purpose. The level of risk may, however, increase if the vote to leave leads to a prolonged period of uncertainty about the legislative or regulatory framework that SSE operates within," said the company.

"It is not yet clear how this matter will now progress, but SSE believes that the UK government should be mindful of the importance that the harmonisation of the Great Britain energy market with the countries in Europe can have on efforts to deliver clean, secure and affordable energy," SSE added.

The UK government, which was in favour of the Remain campaign, published a document back in February that acknowledged a deal would need to be struck under a Brexit scenario to allow the UK to continue its involvement in the Internal Energy Market.

The Internal Energy Market is the single market within Europe for the energy industry, covering electricity and gas, governed and implemented under European Union law.

"SSE agrees with the UK government that collaboration with other European countries on energy matters is important for UK consumers. It therefore hopes that the UK government and the European institutions will provide clarity on future plans for the UK's involvement in the Integrated Energy Market," said SSE.

When it released its latest financial results, SSE recognised that politics, regulation and compliance as one of its principal risks and said prolonged uncertainty following the EU referendum would add to that risk.

"By maintaining a balanced range of economically regulated and market-based energy businesses SSE is strongly positioned to manage changes to the operating environment in which it operates," said SSE.

"SSE's resilient business model ensures that the impact of any uncertainty should be minimised as the UK responds to the result of the European Union referendum," the company added.

SSE, in a separate statement, also responded to the conclusion of the investigation into the UK energy market on Friday.

The Competition & Markets Authority plans to introduce over 30 new measures to the UK energy market as a result of the investigation, which was launched in 2014, focused on increasing competition, driving down costs and modernising the sector.

Many of the main topics highlighted by the CMA were revealed in the preliminary findings published in March, and the authority reiterated that UK customers have been paying GBP1.40 billion more per year than required as 70% of Big Six domestic customers remain on "an expensive 'default' standard variable tariff".

The main measures introduced focus on giving more power to the energy regulator Ofgem, creating a database to store data on customers that have failed to switch for three years, giving price comparison websites a bigger role in assisting customers and helping the market develop by utilising new technology.

SSE said Friday that it is still continuing to assess the detail of the CMA's decision, but believes the measures will help to deliver meaningful improvements for customers.

"It is a tough set of measures but we recognise where it will help drive the energy market forward to better deliver for customers. We've come a long way since the investigation commenced in 2014 and we will continue to engage constructively as we undertake the substantial implementation work in the months ahead," said Alistair Phillips-Davies, chief executive of SSE.

"We hope to see other companies doing the same so the industry can move on and put its energy into delivering for customers," he added.

By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance

Copyright 2016 Alliance News Limited. All Rights Reserved.

Related Shares

More News

LONDON MARKET CLOSE: Stocks Down As Trump Speech Disappoints Investors

LONDON MARKET CLOSE: Stocks Down As Trump Speech Disappoints Investors

13 Nov 19 16:53

UK WINNERS & LOSERS SUMMARY: Tullow Oil Sinks After Cutting Guidance

UK WINNERS & LOSERS SUMMARY: Tullow Oil Sinks After Cutting Guidance

13 Nov 19 10:41

UPDATE 1-Utility SSE profit rises; warns of uncertainties ahead of UK elections

(Updates throughout)By Susanna TwidaleLONDON, Nov 13 (Reuters) - British utility SSE reported higher first-half adjusted pretax profit on Wednesday but warned of challenges for energy firms due to the UK election next month and the opposition Labo...

13 Nov 19 08:25

UPDATE 2-UK's SSE warns on Labour's energy nationalisation policy

(Updates throughout, adds CEO comment)By Susanna TwidaleLONDON, Nov 13 (Reuters) - British utility SSE on Wednesday warned of challenges for energy firms due to the election next month and opposition Labour Party plans to nationalise some energy i...

13 Nov 19 08:25

Login to your account

Don't have an account? Click here to register.